You found a home you love in Westport, but the seller wants to see your earnest money before taking the offer seriously. How much should you put down, who holds it, and what happens if something goes wrong? In a competitive Lower Fairfield County market, getting this right can help you win the house while keeping your risk in check. This guide explains how earnest money works in Westport, what amounts are common, how Connecticut handles escrow, and how to structure a stronger offer without unnecessary exposure. Let’s dive in.
Earnest money basics
Earnest money is a good‑faith deposit you submit with your offer to show the seller you are serious. If the sale closes, the deposit is credited toward your purchase price at closing. If the deal ends for a reason covered by your contract contingencies, you can usually get it back.
It is not the same as your down payment or closing costs. Those are paid at closing. Earnest money is held in escrow from contract acceptance until closing or termination based on the agreement’s terms.
In Westport, sellers look at the deposit as one signal of commitment. A well‑sized deposit, paired with clear contingency protections, can make your offer more competitive.
How much is typical in Westport
Deposit practices vary by price tier and how competitive the situation is. In Westport and Lower Fairfield County, you will commonly see:
- Entry or condo purchases: about 1,000 to 5,000 dollars
- Mid‑range single‑family homes: about 5,000 to 25,000 dollars, or roughly 1 percent of the price
- Higher‑price or luxury homes: 25,000 to 100,000 dollars or more, often 1 to 3 percent of the price
Examples help. On a 1,000,000 dollar purchase, 1 percent equals 10,000 dollars. On a 2,000,000 dollar purchase, 1 percent equals 20,000 dollars. In multiple‑offer situations, sellers may prefer a higher deposit or shorter contingency windows. You can increase your deposit to show commitment while still keeping standard protections in place.
Sellers also weigh your deposit against the entire offer: pre‑approval strength, proof of funds, inspection timing, and other terms. A credible deposit that fits the price point, paired with a clean, realistic plan, reads well in Westport.
How Connecticut holds your deposit
Connecticut is an attorney‑centric closing state. Your deposit is typically held by one of the following, as named in your contract:
- The listing broker’s escrow or trust account
- The buyer’s or seller’s attorney (very common in Connecticut)
- A title company or settlement agent
Funds are held in an escrow or trust account, not a general operating account. The escrow holder follows the written purchase agreement and has fiduciary duties to handle the funds properly. Whether the account is interest‑bearing and who gets any interest is governed by the contract and local practice. Expect little or no interest unless your agreement says otherwise.
Your contract will state the deposit amount, the escrow holder, delivery instructions, and the conditions for release. You will typically deliver the deposit shortly after the offer is accepted, often within 24 to 72 hours. Always obtain a receipt or confirmation that the funds were received and placed in escrow. At closing, the settlement statement will credit this deposit toward your purchase.
Contingencies that protect your deposit
Contingencies are your safety net. If you cancel within the agreed timeframes and follow the notice procedures, you can usually recover your deposit. Common protections include:
- Inspection or due‑diligence contingency. You have a set period to inspect the home and either proceed, negotiate, or cancel. If you cancel on time and as the contract allows, the deposit is typically refundable.
- Mortgage or financing contingency. If you cannot obtain financing per the contract terms by the deadline, you may cancel and receive your deposit back if you follow the notice requirements.
- Appraisal contingency. If the appraisal comes in low, you can renegotiate or cancel based on the contract.
- Title contingency. If a title issue cannot be cured, you can cancel and recover your deposit.
- Sale‑of‑home contingency. This can protect you if you must sell your current home first, but it is less attractive to sellers in competitive situations.
Missing deadlines or notice steps can void these protections. If a buyer defaults without an applicable contingency and the contract has a liquidated damages clause, the seller may be able to keep the deposit. Disputes are often resolved by mutual written release, negotiation, or, if needed, mediation, arbitration, or court. The escrow holder will follow the contract and may hold funds until both parties agree or a resolution is reached.
Typical timeline in Fairfield County
While every deal is different, many Westport transactions follow a similar rhythm:
- Offer accepted; deposit due per contract, often within 24 to 72 hours
- Inspection period about 7 to 10 days, sometimes shorter to compete
- Mortgage commitment often 21 to 45 days
- Appraisal scheduled after loan application
- Closing commonly 30 to 60 days from contract, with cash deals often faster
Your agent and attorney can tailor timelines to your situation and to seller preferences.
Write a strong, safe offer in Westport
You want to stand out without taking on unnecessary risk. Consider these strategies:
- Increase your deposit to a credible level for the price point, while keeping standard contingency protections.
- Shorten contingency periods only if you can act quickly. For example, set a 7‑day inspection window if you already have an inspector lined up.
- Include a current pre‑approval letter or proof of funds with your offer.
- Use an escalation clause carefully if appropriate and permitted. Some sellers prefer simple, clean terms.
- Consider structuring the deposit in stages, such as an initial deposit at acceptance and a second deposit after the inspection period, if acceptable to the seller and escrow holder.
- Avoid waiving key contingencies lightly. Waiving inspection or financing can help you win, but it increases the risk of losing your deposit or being obligated to close when problems arise.
Buyer checklist before you offer
- Get a strong lender pre‑approval and gather proof of funds
- Decide your deposit amount and confirm you can deliver funds quickly
- Confirm the escrow holder and delivery method, and obtain instructions in writing
- Align inspection, appraisal, and financing timelines with your capacity and market conditions
- Understand the release conditions and notice deadlines in your contract
- Decide on wire or cashier’s check and verify fraud prevention steps; call the escrow holder using known contact details before sending any wire
Seller checklist for smoother deals
- Confirm the deposit is received and cleared into the named escrow account and request a receipt
- Review the purchase contract’s liquidated damages and contingency language with your attorney
- Compare competing offers on deposit size and timing, not just price
- Coordinate with your listing attorney or broker to ensure proper escrow handling and clear instructions
Real‑world deposit examples
- Competitive mid‑range purchase. You offer 1,200,000 dollars on a well‑priced Westport home. A 1 percent deposit equals 12,000 dollars. Pair that with a 7‑day inspection and a realistic mortgage commitment date to present a strong, balanced offer.
- Luxury property. On a 2,500,000 dollar home, a deposit in the 1 to 3 percent range can be persuasive, depending on terms. You might offer 25,000 to 75,000 dollars with standard protections and tight timelines to signal commitment without waiving key safeguards.
- Multiple offers. If several buyers are competing, consider raising your deposit while keeping inspection and financing periods crisp. Sellers often value a credible deposit plus clear deadlines more than a risky waiver.
Final thoughts
Earnest money helps you prove commitment while giving the seller confidence to move forward. In Westport, a thoughtful deposit that fits the price point, backed by clear contingencies and timelines, can strengthen your offer without putting your funds at unnecessary risk. If you want help tailoring deposit strategy and timelines to your situation, connect with Jillian Klaff for a personalized market consultation.
FAQs
What does earnest money mean in Connecticut real estate?
- It is a good‑faith deposit you submit with an offer that is held in escrow and applied to your purchase at closing, subject to the contract’s terms and contingencies.
How much earnest money do buyers in Westport usually put down?
- Many buyers offer roughly 1 percent of the price, with common local ranges from 5,000 to 25,000 dollars for mid‑range homes and higher deposits for luxury properties.
Who holds earnest money in Connecticut transactions?
- The contract names the escrow holder, which is often the buyer’s or seller’s attorney, the listing broker’s escrow account, or a title company or settlement agent.
When is my deposit refundable if I cancel?
- It is generally refundable if you cancel within the inspection, financing, appraisal, or title contingency periods and follow the notice and deadline rules in your contract.
Can the seller keep my deposit in Westport?
- If you default without an applicable contingency and the contract includes liquidated damages, the seller may be able to retain the deposit as the agreed remedy.
How fast do I need to deliver the deposit in Westport?
- Most contracts call for delivery shortly after acceptance, often within 24 to 72 hours. Always follow the written instructions and obtain a receipt.
Does earnest money earn interest in Connecticut?
- Not necessarily. Whether interest accrues and who receives it depends on your escrow instructions. Expect little or no interest unless the contract states otherwise.
